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Using a CMS, I found the following description for a user setting.

If checked, this user will be granted "vetted" status. Vetted users create full projects and promote existing experimental sandboxes.

Vetted users is used to refer to users who can create full projects and sandbox projects; non-vetted users are only allowed to create sandbox projects.

Is it correct to use vetted in this case?
If it is correct, what is the meaning of vetted, in this case?

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"Vet" here is being used with this meaning:

"to appraise, verify, or check for accuracy, authenticity, validity, etc.: An expert vetted the manuscript before publication."

So a "vetted" user is one who's been checked out (by the project manager or whoever) and can therefore be given expanded permissions.

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